Hello All,
Good morning! I just wanted to toot our horn a little bit. FIRE Finance has compiled the latest list of top 100 personal finance blogs. It seems we’ve made the cut! Give that there are thousands of personal finance blogs, its not bad to be number 18. Check us out here.
Best,
James
We had so many great comments from yesterday’s post that I figured it would be best to address some of the issues brought up by a continued posting on the issue.
So many things to discuss on the subject it’s hard to know where to start….
I guess for me, so of the issue in questioning the role reversal of women earning more than men is an issue of dependence. I myself know that I would be challenged having to depend on someone entirely in terms of finances. I guess I’ve seen friends of mine have to ask their spouses for grocery money and I found the whole situation to be one that made me scream, “Never let that be me.”
So I guess when it comes down to it, the discussion is probably just as much about whether or not James is ok relying on me financially, but how I would feel in reverse. I guess when it comes down to it, I feel very happy that James and I can manage on one salary. I also deep down probably see it as a loop whole in knowing that it would make me feel better should I ever choose to take any time off.
When it comes down to I think that James & I balance things out very well and it really hasn’t been much of an issue. In fact thinking about the fact that we’ve been blogging for nearly two years and haven’t yet concerned it as an issue to discuss should be some indication.
It is true that James and I have a bit more separate finances in some terms, but our goals are joint through and through. While we might have some separate and some joint accounts, we come together when it comes to working towards our goals as a couple.
In terms of the comment made about same sex couples, in this case my job would actually pay for allowances with same-sex couples. I happen to be very lucky to work at a progressive organization that recognized domestic partners of all kinds. James and I are both in strong agreement that we wish that all organizations would approach spousal benefits this way.
On the point of who makes more money to take care of kids, we have mused on this one before. It’s hard to say for sure, since we plan to be DINKs for some time, but James has voiced that he would be open to staying home with kids if I was making more money. Though in the end we’d ideally like to find an opportunity that balances providing for both of our professional lives.
One last thing that James and I love about living on one income: dreaming about how nice it will be to go back to two incomes after having been used to being on one. We figure that for this reason in an ideal world we will continue to live at our current level for at least a couple of more years before we consider upgrading to a place big enough to move us out of DINK status. In the mean time we’ve basically managed this by my salary in Afghanistan. Thus we’ll see where things take us once James has finished with school and I’m back stateside.
Thanks much for all of your great comments, and keep them coming. I love hearing dialog from folks who have experiences to share.
Cheers,
Miel
Which spouse earns more money is increasingly an issue that couples today are faced with. Barbara Stanney brought this up in a recent post that I came across about how to handle couples finance when she makes more than he. She got me thinking about how James & I have dealt with issues of who makes more money. We DINKs have certainly faced this as an issue, but all and all it hasn’t been so hard to deal with.
When we first moved in together and I had recently moved to DC James made about a third more than I did. We established our joint budget by combining our salaries and splitting expenses by percentage of what was earned, i.e. we did a 40/60 split with James paying more.
As regular readers of our blog would know, James is currently in his third year of grad school working towards his Ph.D. I’ve been the bread winner for the last three years and we recently upped the ante with my recent assignment to Afghanistan.
Now I’m making a significant amount more than I was. In addition to this, the distance means that I’ll now be transfer money to James account for living expenses rather than just paying for household items. As you can imagine, it feels a bit different to be on an allowance of sorts rather than just having things taken care of.
The good thing is that I have a $10k spousal allowance that my job pays for. This makes it a bit easier to handle. Additionally Jame can be comforted by the fact that if we weren’t married I wouldn’t get that money without a spouse. Thus it seems pretty fairly earned by James in my book.
Though James has actually been far more supportive then most men in his situation we still tend to tread a bit lightly.
I also don’t think that James would have as much of issue with my making more if he had a full time job and could be more independent in his household contributions. We both recognize that depending on the paths we take in our careers it is a coin toss on who will make more money in the long term. If I stay in my current line of work it would likely be me. Yet if I shift my career or we move outside of Washington we will likely both make less.
In the long run we figure that it is a give and take. James made more initially and took care of a larger percentage of household items, now I’m taking more financial responsibility. Later we never know. For me I also consider the fact that if I ever decide to take time off for kids that I won’t feel like a burden on our finances. It’s more of an ebb and flow.
Barbara also mentioned that some women can feel resentful for their spouse not sucking it up and getting paid more. I could certainly see how that might be the case if there wasn’t the potential or drive. In our case James is working hard towards his Ph.D. and I have all confidence that he will regain his earning potential after he is back in the job market.
One last note that I find of interest, many of my girlfriends joke that they would love to find a sugar mama like myself. I find it interesting, as they would likely have as hard of a time being supported by a man as James does relying on me. Just food for thought.
I’d love to hear from our readers on how they’ve dealt with this situation.
Cheers,
Miel
Hello All,
Greetings from California! I am writing you today from my uncles gorgeous three level house in San Anselmo. While not as exciting as my wife’s description of the military market in Kabul, today’s posting is a on a more fundamental topic – saving for retirement. For a lot of people, saving for retirement is about as fun as watching paint dry, but a new book by Mark Bruno, Save Now or Die Trying, breathes some life into an otherwise dry topic.
Unlike a great deal of the books that manage to cross our desks, Bruno does a good job with both the content and the delivery of his material. The main topic of Save Now or Die Trying is that people who are in their 20s and 30s should be aggressively saving for their retirement using 401k and IRA plans. This is not earth shattering advice, but Bruno does a compelling job illustrating why you should be saving aggressively and thoroughly discusses the ins and outs of 401ks, IRA and the types of investments that you should consider for these accounts.
In short Bruno’s book provides a better discussion of retirement vehicles and their role in building wealth than most new personal finance books available today. If you’re seriously interested in building wealth using either of these two mechanisms, you might consider picking up a copy.
While I’m happy to recommend the book, there are some important things you should keep in mind about Save Now or Die Trying. First, Bruno is in his early thirties. While this means he’s more in touch with his target audience, he doesn’t speak with the voice of experience that older authors can offer. For example, Bruno seems to know more about saving based on the results of statistical models, rather than from having carved out a fortune himself. While I’m certainly not an expert, I tend to put extra weight on the advice of people who can demonstrate their own ability to attain wealth. This aside, Bruno’s motivation of the problems of saving an
d his thorough discussion make the book better than most available on the topic.
Best,
James
Markets are one of those places that are both similar and very, very different depending upon where you are in the world. That is certainly the case here in Kabul.
Today I explored the local military market with a colleague. The draw is that it is highly secure and your guaranteed not to get harassed too badly. I would have gotten a pictures of the sign that said deadly force will be used if necessary, but it also said that no photography was allowed either.
After being in Afghanistan for a week it was certainly the largest numbers of armed men I’ve seen in one place. As luck would have it there were also plenty of bullet proof vests to choose from.
There were gems of all kinds available as well as plenty of silver coins and such. You could even find Iraqi money with Saddam on it. Unfortunately most of the gems aren’t cut very well. You could likely get it recut and end up with a very good stone though. There were also plenty of silver inlaid pieces, the old guns where the most interesting. A pistol with a barrel for each bullet, sort like you would picture in an old Western movie.
Bartering still works the same. Everyone there spoke English so it takes some of the fun out of haggling. The same rules still apply in being willing to walk away until you get the price you are looking for. I only bought a couple of scarves but managed to talk them down a third of the price. I managed to get them for $5 rather than $30 in DC before I left.
Pirated DVDs are also huge, given that the military likely spend a fair share of their time watching movies and the like. I could have gotten the whole Alias series for $40 when I considered getting it stateside for $150 before coming here. Your average DVD is $2, but even that can be negotiated.
All in all a very fun outing, even if a bit surreal with all the military folks about. I took the trip as a scouting opportunity so when I’m interested in buying I can know where to start from. Also, never fall for giving them a price first. Always wait for them to offer it to you at a ridiculous price first, you are better off.
I know it is a bit off topic for your general finances, but I figured that folks might be interested in what it is like here. I’d love to hear your favorite market story.
Cheers,
Miel
Here is a great quote from W.E.B. DuBois as reported in the Atlanta-Journal Constitution.
“During his economics class at Atlanta University — now Clark Atlanta University — the scholar and educator W.E.B. DuBois was asked by an inquisitive student for the quickest and surest way to prosperity. “What I am about to share,” Dr. DuBois replied, “you would do well to write on your heart and place in your purse. Many a ruined man dates his downfall from the moment he began buying what he did not need. If you are in debt, part of you belongs to your creditor. To whom you give your money, you give your power.””
Hello All,
We dinks tend to get a fair amount of email. Some messages are from Nigerian spammers, some are from the various blog services we subscribe to, sometimes its weirdos asking for a loan. The best kinds of emails we get are from people who want to talk about personal finance!
Most of these kinds of questions are, so “What do I do now”, or “How do I get started” sorts of questions. Well, if you want to more control over your personal finances, there are several thing you can do. These are what the kids call “no brainers”, because they are sure fire ways to improve your bottom line.
1) Pay off your credit cards: There are several reasons to pay off your credit card debt. First, its expensive. Most credit card rates are around 13%, but some of them can charge a LOT more. Second, the interest on credit cards isn’t tax deductible, so there isn’t any tax advantage in carrying it.
2) Max your your 401k: Right, if you have a tax advantaged pension plan like a 401k or 403b plan you should definitely max it out. There are several reasons for this. First, the plans are tax advantaged, which means that every dollar you contribute to your 401k is a dollar off your taxable income. Second, lots of companies will match a given percentage of your contributions. This is typically 3 to 5% or something like that. Third, this also puts your money to work on the market, which will probably give you a better long run return than stashing it in a savings account.
3) Read Up On Personal Finance: If you don’t know whats going on, its hard to know how to get ahead. Try investing some time in a good personal finance book. I recommend Personal Finance for Dummies, by Eric Tyson and Making the Most of Your Money by Jane Quinn. Its important to understand the basics, that way you can better make decisions and recognize good deals on financial products.
Good luck!
-James
Hello and Welcome to Our Reuters Readers,
We want to let everyone know that we have officially become a part of the Reuter’s blog network! As you know, Reuters is one of the world’s premiere news agencies and we’re very happy to be officially affiliated with such an innovative and historical company.
In case you don’t known, Reuters was founded in 1850 during the age of the telegraph by Paul Julius Reuter. Reuter grew his firm until the company eventually built a reputation for having reliable and timely information. They’ve continued to be smart and hard hitting. Nearly every major news source in the globe subscribes to Reuters and they’ve got a network of several thousand journalists operating in over 200 cities in 94 countries.
Yep Folks, its official. We are now a Reuters affiliated blog. Click here to check us out!
Best,
James
As our regular readers know, from time to time we get books to review from Harper Collins Publishers. We do so with full freedom to critique as we like. Thus far that has often meant that we’ve ripped them apart and begun thinking of publishing ourselves since the competition appears to be limited.
One of the most recent books we’ve received was Get Ahead by Going Abroad: A Woman’s Guide to Fast-Track Career Success, by C. Perry Yeatman and Stacie Nevadomski Berdan. Here’s a full summary from the publishers.
While this subject might not be for all of our readers, I do think that they did an excellent job of pointing out the advantages of working abroad and some pointers on how to get there. In my field working abroad is essential to any real career development, thus my currently being in Afghanistan. Yeatman and Berdan come from a more corporate perspective, but I find this to be a valuable asset to their book.
The arguments for working abroad in any field you can manage makes sense though. While there are certainly a great number of perks in working abroad, the benefits of real life experience are undeniable as well.
Even starting at the bottom of the totem pole, as a Peace Corps Volunteer, I do believe that a lot of credit is given to those individuals who can go abroad and hack it at any level. Initially going through the PCV recruitment process I remember thinking that ones ability to “hack it” would be high on the list of determining whether someone got in. I still find this to be a valuable lesson in hiring and promoting people. Essentially you want to know that you can depend on this individual to do what it takes to get the job done.
Demonstrating flexibility and critical thinking skills are also the icing on the cake. While many overseas posting can be a posh set up, it still takes a great deal to navigate unfamiliar territory. Getting to those posh jobs also builds a great deal of credit along the way.
Yeatman and Berdan lists five common traits that are built by living abroad:
Obviously these are all skills that are value anywhere in the world, a truly transportable set of skills.
They also pointed out a couple of biggies that have come up on James and my lists in our decision to have me take this job in Afghanistan. There are some very practical financial reasons that a woman interested in having a family would want to take an overseas posting.
Going abroad might not be for everyone, but those who do take the opportunity will be aptly rewarded.
Reading this book on my flights to Afghanistan definitely made me consider the I could be one of the anecdotes in their book. For me, as I take that as a compliment in choosing to take the fast track.
If we have any readers out there you have given it a go abroad we would love to hear from you.
Best,
Miel
P.S. Their bios also make sure that the book is based on reality:
By age 33, C. Perry Yeatman had worked in Singapore, Moscow, and London. Today she is a senior vice-president and one of the top 50 executives at Kraft Foods, the world’s second-largest food and beverage company.
Stacie Nevadomski Berdan became a vice-president at Burson-Marsteller, the world’s leading PR firm, at age 27. She later jumped from vice-president to global managing director after a three-year stint in Asia. She is now a successful author, speaker and consultant.
Hello People,
If you’ve been watching the headlines in recent weeks, you know that the real estate market is taking a serious beating. Foreclosure are at record highs, lender rebates are increasing, and nationally prices have declined slightly. What all of this suggests, and what we’ve talked about, is perhaps its time to think about using current market conditions to build wealth.
To help give you a sense of how to go about doing this, I wanted to repost some earlier stuff we did from Adriane Berg. Some months ago, I read about an interesting procedure in Adriane Berg’s Your Wealth Building Years for accruing real estate. Basically Berg says some simple steps will help you build real estate wealth*.
They are:
1) Buy an investment property.
2) Hold the thing until you have 20 percent equity (either by mortgage pay down or principal appreciation).
3) Take out a loan against the equity.
4) Invest the loan proceeds in another piece of real estate.
5) The cash flow after taxes from both properties must cover all expenses.
6) Repeat steps 1 through 5 as frequently as it is profitable.
There are a couple of ideas Berg says should be considered when doing this: 1) The importance of a taxes and 2) whether a property manager should be used.
For my part, this seems like a good plan. The major rub is pricing and cash flow. For example, its not sensible to purchase income producing property if rent won’t cover expenses. My wife and I currently have an investment apartment in DC. Now that market conditions are pushing DC property down from its sky-high peaks, the idea of getting another property is becoming increasing attractive. If the credit tightness continues there will be fewer buyers and accordingly the chances of getting a good deal should go up.
In short, Berg’s plan will probably work, but it requires some effort and critical thinking.
Best,
James
Berg, A. (1986) Your Wealth Building Years. pp. 151-152.
Check out Adriane Berg at Powells.com
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